Legislature(1999 - 2000)
02/11/2000 10:11 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 186(HES)
"An Act relating to a University of Alaska post-
secondary education savings program, to the Alaska
Higher Education Savings Trust, and to the Alaska
advance college tuition savings fund; and providing
for an effective date."
SENATOR T. KELLY as prime sponsor came forward to testify
on SB 186. He stated that because of recent tax
legislation passed by Congress, which was a new IRS rule
designed to encourage individual savings for higher
education, over 40 states have enacted or are in the
process of establishing tax deferred savings programs. He
added that this legislation continues a long Alaska
tradition of supporting higher education by making timely
improvements to its current advanced college tuition
payment program and establishing a second tool called the
Alaska Education Savings Trust. He explained that the
program would continue to be administered by the University
of Alaska and would require no new general fund
expenditures. He pointed out that there was a proposed
Committee Substitute before the Finance Committee of which
he recommended the adoption. He noted a small technical
change to the CS that would not allow someone who is in
arrears in child support payments to establish a trust
until they have paid this debt.
Co-Chair Torgerson stated that he would not be offering
amendment number one, which was suggested by the sponsor
since it is included in the CS on page two, line two. He
added that the other clarification on the exemption from
child support payments is on page four, line 16.
Tape: SFC - 99 #26, Side B, 10:55 am.
ANN ALLEN, TIAA-CREF, [organization's full name not given]
testified via teleconference from New York, supported this
legislation. She stated that her organization manages
similar programs in nine other states. She added that her
organization's core business is pension plans for higher
education and managing tuition savings account plans.
BOB MANLEY, Estate Planning and Tax Attorney, with Hughes,
Thorsness, Powell, Huddleston & Bauman, LLC testified via
teleconference from Anchorage, stated that he has practiced
in this related field for 25 years. He noted that he is
part of an informal group of estate and tax attorneys who
work pro bono by assisting with technical aspects of
legislation. He pointed out that he was not testifying on
behalf of any organization and he voiced his support of
this legislation. He added that it has significant income
tax, estate tax and money management advantages to
Alaskans.
JIM LYNCH, Interim Vice President of Finance, University of
Alaska testified via teleconference from Anchorage, stated
that he serves on the Executive Board for the college
savings programs and he is the principal drafter of the
Advances College Tuition Program for the University. He
offered that as part of his role on the Executive Board, he
did participate in the drafting of section 529 and he
argued the exempt status of the University's program before
the national office of the Internal Revenue Service. He
noted that he supports this bill.
Senator Wilken referred to page three, line 24 of version
"V" of the committee substitute and suggested that the
Committee insert the word "all" before the word
administrative. He thought that the Committee envisioned
this program to be self-supporting. He pointed out by
inserting this word; the Committee clearly defines for the
future, that the Committee expects the participants to pay
all administrative fees.
Senator Wilken made a motion to adopt version "V" of SB
186. Hearing no objection, it was so moved. He then made
a motion to move amendment number two as proposed. Hearing
no objection, amendment number two was so moved.
Senator Wilken referred to page four, line four, he
clarified this section that spoke to the funds on deposit
not being considered by the University in regards to
eligibility of state funded scholarships. He pointed out
that if this was a needs based scholarship, he thought that
they should take into account funds on deposit. He thought
this section was in need of clarification in how this part
of the bill relates to needs based scholarships.
Mr. Lynch responded that the intent of this section was not
to affect need based scholarships. He added that they
could include the language "the state may not limit
eligibility for state funded need based scholarships." He
added that right now the state has no funded programs for
this type of scholarships. Co-Chair Torgerson clarified
that they should insert "need based" between funding and
scholarship on page four, line five.
Senator Wilken made a motion to move amendment number three
allowing for on page four, line five, "except for needs-
based scholarships" at the beginning of section (e).
Hearing no objection it was so moved.
Senator Wilken made a motion to move SB 186, version 1-
LS1084\V with individual recommendations and attached
fiscal note from the Department of Revenue.
Senator P. Kelly added that the Department of Revenue
fiscal note was dropped after the first Committee
Substitute was drafted. He stated that there was no fiscal
impact through the Department of Revenue. He continued
that at one time they administrated the college pre-paid
tuition program and they no longer do this.
ADJOURNED
Co-Chair Torgerson, hearing no objection to the motion as
stated, SB 186 was MOVED FROM COMMITTEE. He adjourned the
meeting at 11:05 a.m.
SFC-00 SS1 (1) 02/11/00
| Document Name | Date/Time | Subjects |
|---|